CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Sep. 30, 2011	Dec. 31, 2010
Property, Plant and Equipment
Regulated utility plant, at cost	$ 1,290,874	$ 1,227,107
Non utility property, at cost	7,389	5,904
Utility plant, at cost	1,298,263	1,233,011
Less - Accumulated depreciation	(407,129)	(378,055)
Net property, plant and equipment	891,134	854,956
Other Property and Investments
Goodwill	1,116	1,116
Other property and investments	11,894	10,981
Total other property and investments	13,010	12,097
Current Assets
Cash and cash equivalents	5,215	4,197
Accounts receivable - customers	25,048	17,507
Unbilled revenue	22,192	20,348
Receivable from the U.S. government	10,421	3,689
Other accounts receivable	11,228	7,808
Income taxes receivable	8,964	12,342
Materials and supplies, at average cost	2,817	2,161
Regulatory assets - current	31,104	34,152
Prepayments and other current assets	4,896	6,157
Costs and estimated earnings in excess of billings on uncompleted contracts	28,711	36,924
Deferred income taxes - current	9,550	8,816
Assets of discontinued operations (Note 10)		50,883
Total current assets	160,146	204,984
Regulatory and Other Assets
Regulatory assets	109,272	101,801
Other accounts receivable	4,006	3,777
Costs and estimated earnings in excess of billings on uncompleted contracts	9,874	5,824
Deferred income taxes	11	495
Other	8,395	8,101
Total regulatory and other assets	131,558	119,998
Total Assets	1,195,848	1,192,035
Capitalization
Common shares, no par value	231,129	227,385
Earnings reinvested in the business	173,923	150,156
Total common shareholders' equity	405,052	377,541
Long-term debt	340,404	299,839
Total capitalization	745,456	677,380
Current Liabilities
Notes payable to banks	4,500	60,900
Long-term debt - current	358	376
Accounts payable	43,656	36,155
Income taxes payable	487	2,277
Accrued employee expenses	9,116	8,084
Accrued interest	6,440	3,256
Deferred income taxes - current		88
Unrealized loss on purchased power contracts	7,576	6,850
Billings in excess of costs and estimated earnings on uncompleted contracts	26,612	16,808
Other	17,655	17,017
Liabilities of discontinued operations (Note 10)		27,031
Total current liabilities	116,400	178,842
Other Credits
Advances for construction	75,574	78,325
Contributions in aid of construction - net	99,345	95,460
Deferred income taxes	105,401	101,917
Unamortized investment tax credits	1,995	2,063
Accrued pension and other postretirement benefits	41,169	42,152
Billings in excess of costs and estimated earnings on uncompleted contracts	3,383	8,618
Other	7,125	7,278
Total other credits	333,992	335,813
Commitments and Contingencies (Note 9)
Total Capitalization and Liabilities	1,195,848	1,192,035
GOLDEN STATE WATER COMPANY
Property, Plant and Equipment
Utility plant, at cost	1,290,874	1,227,107
Less - Accumulated depreciation	(404,164)	(375,740)
Net property, plant and equipment	886,710	851,367
Other Property and Investments
Total other property and investments	9,414	8,899
Current Assets
Cash and cash equivalents	2,013	1,541
Accounts receivable - customers	25,048	17,507
Unbilled revenue	22,192	20,348
Inter-company receivable	29	2,057
Other accounts receivable	5,837	6,174
Income taxes receivable from Parent	9,398	7,421
Materials and supplies, at average cost	1,976	1,779
Regulatory assets - current	31,104	34,152
Prepayments and other current assets	4,700	5,695
Deferred income taxes - current	8,467	7,814
Total current assets	110,764	104,488
Regulatory and Other Assets
Regulatory assets	109,272	101,801
Other accounts receivable	4,006	3,777
Other	8,563	8,146
Total regulatory and other assets	121,841	113,724
Total Assets	1,128,729	1,078,478
Capitalization
Common shares, no par value	218,447	217,149
Earnings reinvested in the business	155,508	141,146
Total common shareholders' equity	373,955	358,295
Long-term debt	340,404	299,839
Total capitalization	714,359	658,134
Current Liabilities
Long-term debt - current	358	376
Accounts payable	34,641	25,463
Inter-company payable	9,618	34,575
Accrued employee expenses	8,001	7,212
Accrued interest	6,439	3,251
Unrealized loss on purchased power contracts	7,576	6,850
Other	17,206	16,032
Total current liabilities	83,839	93,759
Other Credits
Advances for construction	75,574	78,325
Contributions in aid of construction - net	99,345	95,460
Deferred income taxes	105,416	101,474
Unamortized investment tax credits	1,995	2,063
Accrued pension and other postretirement benefits	41,169	42,152
Other	7,032	7,111
Total other credits	330,531	326,585
Commitments and Contingencies (Note 9)
Total Capitalization and Liabilities	$ 1,128,729	$ 1,078,478

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2011	Dec. 31, 2010
Accounts receivable - customers, allowance for doubtful accounts	$ 676	$ 670
Receivable from the U.S. government, allowance for doubtful accounts	0	43
Other accounts receivable, allowance for doubtful accounts	351	338
GOLDEN STATE WATER COMPANY
Accounts receivable - customers, allowance for doubtful accounts	676	670
Other accounts receivable, allowance for doubtful accounts	$ 307	$ 335

CONSOLIDATED STATEMENTS OF INCOME (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Operating Revenues
Water	$ 89,756	$ 82,634	$ 234,233	$ 211,507
Electric	8,746	7,917	27,180	26,741
Contracted services	21,395	20,749	62,620	56,994
Total operating revenues	119,897	111,300	324,033	295,242
Operating Expenses
Water purchased	16,094	15,693	37,679	37,259
Power purchased for pumping	3,141	3,459	6,842	7,062
Groundwater production assessment	3,795	3,311	10,307	8,597
Power purchased for resale	3,038	2,950	9,767	9,495
Supply cost balancing accounts	5,050	6,219	14,374	14,720
Other operation expenses	7,586	7,788	21,449	21,734
Administrative and general expenses	18,585	26,282	55,874	61,478
Depreciation and amortization	9,554	8,397	28,829	25,121
Maintenance	4,346	4,314	12,695	12,882
Property and other taxes	3,682	3,566	10,640	10,469
ASUS construction expenses	12,606	12,424	36,151	29,225
Net (gain) loss on sale of property			(128)	2
Total operating expenses	87,477	94,403	244,479	238,044
Operating Income	32,420	16,897	79,554	57,198
Other Income and Expenses
Interest expense	(6,194)	(4,963)	(18,807)	(16,491)
Interest income	202	166	500	985
Other	(170)	(553)	(379)	(558)
Total other income and expenses	(6,162)	(5,350)	(18,686)	(16,064)
Income from continuing operations before income tax expense	26,258	11,547	60,868	41,134
Income tax expense	10,641	5,878	25,568	18,305
Income from continuing operations	15,617	5,669	35,300	22,829
Income (loss) from discontinued operations, net of tax	(18)	983	3,850	1,288
Net Income	15,599	6,652	39,150	24,117
Basic Earnings Per Common Share
Income from continuing operations (in dollars per share)	$ 0.83	$ 0.31	$ 1.88	$ 1.22
Income from discontinued operations (in dollars per share)		$ 0.05	$ 0.20	$ 0.07
Net Income - Basic (in dollars per share)	$ 0.83	$ 0.36	$ 2.08	$ 1.29
Fully Diluted Earnings Per Share
Income from continuing operations (in dollars per share)	$ 0.83	$ 0.30	$ 1.88	$ 1.21
Income from discontinued operations (in dollars per share)		$ 0.05	$ 0.20	$ 0.07
Net Income - Diluted (in dollars per share)	$ 0.83	$ 0.35	$ 2.08	$ 1.28
Weighted Average Number of Shares Outstanding (in shares)	18,701	18,595	18,672	18,573
Weighted Average Number of Diluted Shares (in shares)	18,852	18,734	18,816	18,714
Dividends Declared Per Common Share (in dollars per share)	$ 0.28	$ 0.26	$ 0.82	$ 0.78
GOLDEN STATE WATER COMPANY
Operating Revenues
Water	89,756	82,634	234,233	211,507
Electric	8,746	7,917	27,180	26,741
Total operating revenues	98,502	90,551	261,413	238,248
Operating Expenses
Water purchased	16,094	15,693	37,679	37,259
Power purchased for pumping	3,141	3,459	6,842	7,062
Groundwater production assessment	3,795	3,311	10,307	8,597
Power purchased for resale	3,038	2,950	9,767	9,495
Supply cost balancing accounts	5,050	6,219	14,374	14,720
Other operation expenses	7,121	6,884	18,677	19,142
Administrative and general expenses	15,398	23,009	45,182	51,382
Depreciation and amortization	9,334	8,181	28,171	24,544
Maintenance	3,765	3,706	10,755	11,305
Property and other taxes	3,366	3,154	9,638	9,314
Net (gain) loss on sale of property			(128)	5
Total operating expenses	70,102	76,566	191,264	192,825
Operating Income	28,400	13,985	70,149	45,423
Other Income and Expenses
Interest expense	(6,138)	(4,864)	(18,436)	(16,196)
Interest income	149	163	439	469
Other	(171)	(395)	(570)	(403)
Total other income and expenses	(6,160)	(5,096)	(18,567)	(16,130)
Income from continuing operations before income tax expense	22,240	8,889	51,582	29,293
Income tax expense	9,212	4,736	22,147	13,482
Net Income	$ 13,028	$ 4,153	$ 29,435	$ 15,811

CONSOLIDATED STATEMENTS OF CASH FLOW (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010
Cash Flows From Operating Activities:
Net income	$ 39,150	$ 24,117
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sale of CCWC, net of taxes, included in discontinued operations	(2,454)
Depreciation and amortization	28,829	25,901
Provision for doubtful accounts	776	833
(Gain) loss on sale of property	(128)	2
Deferred income taxes and investment tax credits	4,317	6,352
Stock-based compensation expense	1,245	1,237
Impairment and other charges		9,011
Other - net	1,307	(609)
Changes in assets and liabilities:
Accounts receivable - customers	(8,241)	(5,144)
Unbilled revenue	(1,844)	(5,846)
Other accounts receivable	(3,354)	1,842
Receivable from the U.S. government	(6,732)	(2,395)
Materials and supplies	(656)	(209)
Prepayments and other current assets	1,261	980
Regulatory assets - supply cost balancing accounts	14,374	14,720
Costs and estimated earnings in excess of billings on uncompleted contracts	4,163	(13,446)
Other assets (including other regulatory assets)	(16,545)	(22,984)
Accounts payable	2,075	8,581
Income taxes receivable/payable	(2,816)	(8,214)
Billings in excess of costs and estimated earnings on uncompleted contracts	4,569	6,851
Accrued pension and other postretirement benefits	(2,351)	(3,399)
Other liabilities	5,692	(1,047)
Net cash provided	62,637	37,134
Cash Flows From Investing Activities:
Construction expenditures	(63,574)	(57,703)
Proceeds from the sale of CCWC	29,603
Other	(72)	118
Net cash used	(34,043)	(57,585)
Cash Flows From Financing Activities:
Proceeds from issuance of Common Shares and stock option exercises	2,350	1,798
Receipt of advances for and contributions in aid of construction	6,149	4,492
Refunds on advances for construction	(3,843)	(3,452)
Repayments of long-term debt	(22,304)	(312)
Proceeds from issuance of long-term debt, net of issuance costs	61,911
Net change in notes payable to banks	(56,400)	39,800
Dividends paid	(15,306)	(14,485)
Other - net	(133)	(144)
Net cash (used) provided	(27,576)	27,697
Net increase in cash and cash equivalents	1,018	7,246
Cash and cash equivalents, beginning of period	4,197	1,685
Cash and cash equivalents, end of period	5,215	8,931
Less cash and cash equivalents of discontinued operations		1,239
Cash and cash equivalents of continuing operations	5,215	7,692
GOLDEN STATE WATER COMPANY
Cash Flows From Operating Activities:
Net income	29,435	15,811
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	28,171	24,544
Provision for doubtful accounts	697	814
(Gain) loss on sale of property	(128)	5
Deferred income taxes and investment tax credits	4,460	6,137
Stock-based compensation expense	1,099	937
Impairment and other charges		9,011
Other - net	928	(726)
Changes in assets and liabilities:
Accounts receivable - customers	(8,241)	(5,013)
Unbilled revenue	(1,844)	(5,747)
Other accounts receivable	111	3,038
Materials and supplies	(197)	(34)
Prepayments and other current assets	995	958
Regulatory assets - supply cost balancing accounts	14,374	14,720
Other assets (including other regulatory assets)	(16,571)	(22,863)
Accounts payable	3,752	2,027
Inter-company receivable/payable	452	175
Income taxes receivable/payable from/to Parent	(1,977)	(7,936)
Accrued pension and other postretirement benefits	(2,351)	(3,399)
Other liabilities	5,798	(1,473)
Net cash provided	58,963	30,986
Cash Flows From Investing Activities:
Construction expenditures	(62,089)	(56,202)
Proceeds from sale of property	144	115
Net cash used	(61,945)	(56,087)
Cash Flows From Financing Activities:
Proceeds from issuance of Common Shares to Parent		20,000
Receipt of advances for and contributions in aid of construction	6,149	4,416
Refunds on advances for construction	(3,843)	(3,362)
Repayments of long-term debt	(22,304)	(312)
Proceeds from issuance of long-term debt, net of issuance costs	61,911
Net change in inter-company borrowings	(23,381)	22,400
Dividends paid	(15,000)	(14,600)
Other - net	(78)	(89)
Net cash (used) provided	3,454	28,453
Net increase in cash and cash equivalents	472	3,352
Cash and cash equivalents, beginning of period	1,541	1,096
Cash and cash equivalents, end of period	2,013	4,448
Cash and cash equivalents of continuing operations	$ 2,013

Summary of Significant Accounting Policies:

9 Months Ended

Sep. 30, 2011

Summary of Significant Accounting Policies:

Summary of Significant Accounting Policies:

Note 1 — Summary of Significant Accounting Policies:

Nature of Operations: American States Water Company (“AWR”) is the parent company of Golden State Water Company (“GSWC”) and American States Utility Services, Inc. (“ASUS”) (and its subsidiaries, Fort Bliss Water Services Company (“FBWS”), Terrapin Utility Services, Inc. (“TUS”), Old Dominion Utility Services, Inc. (“ODUS”), Palmetto State Utility Services, Inc. (“PSUS”) and Old North Utility Services, Inc. (“ONUS”)). The subsidiaries of ASUS may be collectively referred to herein as the “Military Utility Privatization Subsidiaries.” AWR was also the parent company of Chaparral City Water Company (“CCWC”) until the completion of the sale of CCWC to EPCOR Water (USA) Inc. on May 31, 2011.

GSWC is a public utility engaged principally in the purchase, production, distribution and sale of water in California serving approximately 256,000 customers. GSWC also distributes electricity in several San Bernardino Mountain communities serving approximately 23,000 customers. The California Public Utilities Commission (“CPUC”) regulates GSWC’s water and electric businesses, including properties, rates, services, facilities and other matters. AWR’s assets and operating income are primarily those of GSWC.

ASUS performs water and wastewater services, including the operation, maintenance, renewal and replacement of the water and/or wastewater systems on a contract basis. Through its wholly owned subsidiaries, ASUS operates and maintains the water and/or wastewater systems at various military bases pursuant to 50-year firm, fixed-price contracts, which are subject to periodic price redeterminations and modifications for changes in circumstances, and changes in laws and regulations. There is no direct regulatory oversight by the CPUC over AWR or the operation, rates or services provided by ASUS or any of its wholly owned subsidiaries.

Basis of Presentation: The consolidated financial statements and notes thereto are being presented in a combined report being filed by two separate Registrants: AWR and GSWC. References in this report to “Registrant” are to AWR and GSWC, collectively, unless otherwise specified.

The consolidated financial statements of AWR include the accounts of AWR and its subsidiaries, all of which are wholly owned. These financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. Inter-company transactions and balances have been eliminated in the AWR consolidated financial statements. The assets and liabilities of CCWC have been classified as current assets and liabilities held for sale as of December 31, 2010. The operational results for the periods presented and the gain on disposal of CCWC are reported in discontinued operations, net of transaction costs.

The consolidated financial statements included herein have been prepared by Registrant, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The December 31, 2010 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In the opinion of management, all adjustments, consisting of normal, recurring items and estimates necessary for a fair statement of the results for the interim periods, have been made. It is suggested that these consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Form 10-K for the year ended December 31, 2010 filed with the SEC.

GSWC’s Related Party Transactions: GSWC and other subsidiaries provide and receive various services to and from their parent, AWR, and among themselves. In addition, AWR has a $100.0 million syndicated credit facility. AWR borrows under this facility and provides funds to its subsidiaries, including GSWC, in support of their operations. Amounts owed to AWR for borrowings under this facility are included in inter-company payables on GSWC’s balance sheets as of September 30, 2011 and December 31, 2010. The interest rate charged to GSWC and other affiliates is sufficient to cover AWR’s interest cost under the credit facility. GSWC also allocates certain corporate office administrative and general costs to its affiliate, ASUS using allocation factors mandated by the CPUC. Through May 31, 2011, GSWC also allocated costs to CCWC.

On October 25, 2011, the Board of Directors approved the issuance of four additional shares of GSWC Common Shares to AWR for $10.0 million. Proceeds from the issuance was used to pay down GSWC’s intercompany borrowings due to AWR.

Long-Term Debt: On April 14, 2011 GSWC sold $62.0 million in aggregate principal amount of its 6% Notes (“the Notes”). The Notes will mature on April 15, 2041. Interest on the Notes is payable semi-annually in arrears on April 15 and October 15, at the rate of 6% per annum. The Notes are unsecured and unsubordinated and rank equally with all of GSWC’s unsecured and unsubordinated debt. A portion of the proceeds were used in May 2011 to redeem $22.0 million of GSWC’s 7.65% Medium-Term Notes, Series B and to pay a redemption premium of $421,000. The remainder of the proceeds was used to pay down short-term borrowings from AWR and to fund capital expenditures.

Sales and Use Taxes: GSWC bills certain sales and use taxes levied by state or local governments to its customers. Included in these sales and use taxes are franchise fees, which GSWC pays to various municipalities (based on ordinances adopted by these municipalities) in order to use public right of way for utility purposes. GSWC bills these franchise fees to its customers based on a CPUC-authorized rate. These franchise fees, which are required to be paid regardless of GSWC’s ability to collect from the customer, are accounted for on a gross basis. GSWC’s franchise fees billed to customers and recorded as operating revenue were approximately $942,000 and $866,000 for the three months ended September 30, 2011 and 2010, respectively, and $2,423,000 and $2,266,000 for the nine months ended September 30, 2011 and 2010, respectively. When GSWC acts as an agent, and the tax is not required to be remitted if it is not collected from the customer, the taxes are accounted for on a net basis.

Depending on the state in which the operations are conducted, ASUS and its subsidiaries are also subject to certain state non-income tax assessments generally computed on a “gross receipts” or “gross revenues” basis. These non-income tax assessments are required to be paid regardless of whether the subsidiary is reimbursed by the U.S. government for these assessments under its 50-year contracts with the U.S. government. The non-income tax assessments are accounted for on a gross basis and totaled $168,000 and $258,000 during the three months ended September 30, 2011 and 2010, respectively, and $533,000 and $697,000 for the nine months ended September 30, 2011 and 2010, respectively.

Recently Adopted Accounting Pronouncements: In October 2009, the Financial Accounting Standards Board (“FASB”) issued an update to the accounting standards and provided amendments to the criteria of Accounting Standards Codification Topic 605, “Revenue Recognition,” for separately recognizing consideration in multiple-deliverable arrangements. The amendments establish a selling price hierarchy for determining the selling price of a deliverable. This guidance was effective for the Registrant beginning January 1, 2011 and did not have any impact on its consolidated financial statements.

In January 2010, the FASB issued an update to the accounting standards and amended the disclosure guidance with respect to fair value measurements. Specifically, the new guidance requires disclosure of amounts transferred in and out of Levels 1 and 2 fair value measurements, a reconciliation presented on a gross basis rather than a net basis of activity in Level 3 fair value measurements, greater disaggregation of the assets and liabilities for which fair value measurements are presented and more robust disclosure of the valuation techniques and inputs used to measure Level 2 and 3 fair value measurements. The adoption of this guidance had no impact on Registrant’s consolidated financial statements.

In September 2011, the FASB issued an update to the accounting standards and provided amendments to Accounting Standards Codification Topic 350, “Intangibles — Goodwill and Other,” to simplify the testing of goodwill impairment. The amendment allows an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test required under Topic 350. If an entity determines it is not more likely than not that the fair value is less than the carrying amount, then performing the two-step impairment test is unnecessary. This guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Registrant does not believe this will have a significant impact on its consolidated financial statements.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on Registrant’s consolidated financial statements upon adoption.

Regulatory Matters:

9 Months Ended

Sep. 30, 2011

Regulatory Matters:

Regulatory Matters:

Note 2 — Regulatory Matters:

In accordance with accounting principles for rate-regulated enterprises, Registrant records regulatory assets, which represent probable future revenue associated with certain costs that will be recovered from customers through the ratemaking process, and regulatory liabilities, which represent probable future reductions in revenue associated with amounts that are to be credited to customers through the ratemaking process. At September 30, 2011, Registrant had approximately $34.6 million of regulatory assets not accruing carrying costs. Of this amount, $29.0 million relates to the underfunded positions of the pension and other post-retirement obligations, $3.0 million relates to deferred income taxes representing accelerated tax benefits flowed through to ratepayers, which will be included in rates concurrently with recognition of the associated future tax expense, and $7.6 million relates to a memorandum account authorized by the CPUC to track unrealized gains and losses on GSWC’s purchase power contracts over the life of the contract. The remainder relates to other items that do not provide for or incur carrying costs that Registrant expects to be reflected in rates over a short period. Regulatory assets, less regulatory liabilities, included in the consolidated balance sheets for continuing operations are as follows:

(dollars in thousands)	September 30, 2011			December 31, 2010
GSWC
Electric supply cost balancing account	$	8,409		$	10,305
Water supply cost balancing accounts	1,488			3,374
Water Revenue Adjustment Mechanism, net of Modified Cost Balancing Account	39,925			30,890
Base Revenue Requirement Adjustment Mechanism	3,330			1,889
Water Conservation Memorandum Account	861			1,435
Costs deferred for future recovery on Aerojet case	17,511			18,309
Pensions and other post-retirement obligations	31,183			32,191
Derivative unrealized loss (Note 4)	7,576			6,850
Flow-through taxes, net	3,031			4,270
Electric transmission line abandonment costs	2,482			2,638
Asset retirement obligations	2,866			2,711
Low income rate assistance balancing accounts	5,368			4,657
General rate case memorandum accounts	14,850			20,404
Santa Maria adjudication memorandum accounts	3,698			3,737
Bay Point balancing accounts	5,855			—
Other regulatory assets, net	6,012			6,754
Various refunds to customers	(14,069		)	(14,461		)
Total	$	140,376		$	135,953

Regulatory matters are discussed in detail in the consolidated financial statements and the notes thereto included in the Form 10-K for the year ended December 31, 2010 filed with the SEC. The discussion below focuses on significant matters and changes since December 31, 2010.

Electric Supply Cost Balancing Accounts:

Electric power costs incurred by GSWC’s Bear Valley Electric Service (“BVES”) division continue to be charged to its electric supply cost balancing account. During the nine months ended September 30, 2011, the under-collection decreased by approximately $1.9 million primarily due to a surcharge collected from customers of 2.2¢ per kilowatt hour.

GSWC’s current power contract provides for 13 megawatts (“MW”) of electric energy at a fixed price of $67.75 per megawatt-hour (“MWh”) during 2011 as compared to the $77 per MWh included in rates. The reduction in the actual price of purchased power helps decrease the under-collection balance in the electric supply cost balancing account. To the extent that the actual weighted average annual cost for power purchased exceeded the $77 per MWh amount prior to September 1, 2011, GSWC was not be able to include these amounts in its balancing account and such amounts were expensed. Beginning September 1, 2011, purchased energy costs included in the electric supply cost balancing account were no longer subject to a weighted annual average cost of $77 per MWh cap. There were no amounts expensed over the $77 per MWh cap during the three and nine months ended September 30, 2011 and 2010. As of September 30, 2011, the electric supply cost balancing account consists of $4.6 million for costs of abandonment of a transmission line upgrade and $3.8 million for changes in purchased energy and power system delivery costs.

Water Supply Cost Balancing Accounts:

Prior to the implementation of the Modified Cost Balancing Account (“MCBA”) further discussed below, Registrant maintained water supply cost balancing accounts for GSWC to account for under-collections and over-collections of revenues designed to recover such costs. These supply cost balancing accounts tracked differences between the cost for supply items (water, power and pump taxes) charged by GSWC’s suppliers and the cost for those items incorporated into GSWC’s rates. Under-collections (recorded as regulatory assets) occurred when the cost exceeded the amount in rates for these items and, conversely, over-collections (recorded as regulatory liabilities) occurred when the cost of these items were less than the amount in rates. Typically, under-collections or over-collections, when they occurred, were tracked in the supply cost balancing accounts for future recovery or refund through a surcharge (in the event of an under-collection) or through a surcredit (in the event of an over-collection) on customers’ bills. Registrant accrues interest on its supply cost balancing accounts at the rate prevailing for 90-day commercial paper.

As of September 30, 2011, there is a $1.5 million net under-collection remaining in the water supply cost balancing accounts relating to GSWC’s Region I. Currently, there are surcharges in place to recover these under-collections. When these surcharges expire, any unrecovered balances will be included for recovery in a future filing.

The MCBA account replaces the water supply cost balancing account. Under the MCBA, GSWC is permitted to recover supply costs related to changes in water supply mix in addition to rate changes by GSWC’s suppliers.

Water Revenue Adjustment Mechanism (“WRAM”) and Modified Cost Balancing Account (“MCBA”):

GSWC records the difference between what it bills its water customers and that which is authorized by the CPUC using the WRAM and MCBA accounts approved by the CPUC.

Under the WRAM, GSWC records the adopted level of volumetric revenues as authorized by the CPUC for metered accounts (adopted volumetric revenues). The adopted volumetric revenues consider the seasonality of consumption of water based upon historical averages. The variance between adopted volumetric revenues and actual billed volumetric revenues for metered accounts is recorded as a positive or negative component of revenue with an offsetting entry, respectively, to an asset or liability balancing account (tracked individually for each rate making area). The asset or liability represents amounts that will be billed or refunded to customers in the future. The WRAM only applies to customer classes with conservation rates in place. Currently, the majority of GSWC’s water customers have conservation tiered rate billing structures.

Under the MCBA, GSWC began tracking adopted and actual expense levels for purchased water, purchased power and pump taxes, as established by the CPUC. GSWC records the variances (which include the effects of changes in both rate and volume) between adopted and actual purchased water, purchased power and pump tax expenses. GSWC recovers from or refunds to customers the amount of such variances at a later date. GSWC tracks these variances individually for each rate-making area. Unlike the WRAM, the MCBA applies to all customer classes.

The balances in the WRAM and MCBA assets and liabilities accounts will fluctuate on a monthly basis depending upon the variance between adopted and actual results. The recovery or refund of the WRAM is netted against the MCBA over- or under-collection for each rate-making area. Balances in these accounts bear interest at the current 90-day commercial paper rate.

GSWC intends to seek approval from the CPUC to refund or collect the balance in these accounts when the net amount at the end of the calendar year for Regions II and III and any ratemaking area in Region I achieves a pre-determined level (i.e., at least 2.5 percent over- or under-recovery of the approved revenue requirement).

In 2010, surcharges were put in place to recover $20.4 million of 2009 WRAM and MCBA balances accumulated as of December 31, 2009. Based on CPUC guidelines, recovery periods relating to the 2009 balances range between 12 and 24 months. In March 2011, GSWC filed for recovery of $19.6 million in 2010 WRAM and MCBA balances. Surcharges have been put in place to recover this amount. Included in this amount is approximately $1.2 million representing balances from the water supply cost balancing accounts. Recovery periods relating to the 2010 balances will range between 12 and 36 months. In September 2010, GSWC, along with other California water utilities, filed an application with the CPUC to modify the recovery period of the WRAM and MCBA accounts to 24 months or less. A decision on this application is expected in late 2011 or early 2012.

For the three months ended September 30, 2011 and 2010, surcharges of approximately $5.2 million and $2.6 million, respectively, were billed to customers to collect previously incurred under-collections in the WRAM, net of MCBA balancing accounts. For the nine months ended September 30, 2011 and 2010, surcharges of approximately $10.8 million and $4.1 million, respectively, were billed to customers related to the WRAM and MCBA balancing accounts. As of September 30, 2011, GSWC had a net aggregated regulatory asset of $39.9 million which is comprised of a $62.0 million under-collection in the WRAM accounts and a $22.1 million over-collection in the MCBA accounts.

Aerojet Litigation Memorandum Account:

On July 21, 2005, the CPUC authorized GSWC to collect approximately $21.3 million of the Aerojet litigation memorandum account, through a rate surcharge, which will continue for no longer than 20 years. Beginning in October 2005, new rates went into effect to begin amortizing the memorandum account over a 20-year period. A rate surcharge generating approximately $364,000 and $278,000 was billed to customers during the three months ended September 30, 2011 and 2010, respectively. This rate surcharge generated approximately $823,000 and $670,000 for the nine months ended September 30, 2011 and 2010, respectively. GSWC will keep the Aerojet memorandum account open until the earlier of full amortization of the balance or 20 years. However, no costs will be added to the memorandum account, other than on-going interest charges approved in the CPUC decision.

Aerojet has also agreed to reimburse GSWC $17.5 million, plus interest accruing from January 1, 2004, for GSWC’s past legal and expert costs, which is included in the Aerojet litigation memorandum account. The reimbursement of the $17.5 million is contingent upon the issuance of land use approvals for development in a defined area within Aerojet property in Eastern Sacramento County and the receipt of certain fees in connection with such development.

At this time, management believes the full balance of the Aerojet litigation memorandum account will be collected either from Aerojet or customers.

General Rate Case Memorandum Accounts:

The balance in the general rate case memorandum accounts represents the revenue differences between interim rates and final rates authorized by the CPUC due to delays in receiving decisions on various general rate case applications. As of September 30, 2011, there is an aggregate $14.9 million in the general rate case memorandum accounts. The majority of this amount relates to the final decision issued by the CPUC in November 2010 on the Region II, Region III and general office rate case for rates in years 2010, 2011 and 2012. Due to delays in issuing a decision on this rate case, interim rates for Region II and Region III were established effective January 1, 2010. The final decision approved rate increases retroactive to January 1, 2010. Accordingly, in November 2010 GSWC recorded a $19.5 million regulatory asset representing the difference between interim rates and the final rates authorized by the CPUC. Effective January 1, 2011, a twenty-four month surcharge went into effect to collect the $19.5 million retroactive portion of the revenue increase. During the three and nine months ended September 30, 2011, approximately $2.6 million and $5.6 million, respectively, have been collected from customers. If GSWC has not fully recovered the amount of this under-collection at the end of the twenty-four month period, GSWC will seek recovery of any amounts not recovered through this surcharge.

Excess Usage Charges - Refund to Customers:

In July 2009, GSWC began receiving reduced water allocations from member agencies of the Metropolitan Water District of Southern California (“MWD”). As a result, in July 2009, GSWC began implementing water rationing, restrictions, and excess usage charges to its customers in several of its service areas. The excess usage charges were being collected in the event that penalties were required to be paid to MWD for exceeding GSWC’s water allocations. Because GSWC was able to comply with the reduced water allocations from MWD, it will not have to remit to MWD these excess usage charges collected from its customers. In May 2011, GSWC ended water rationing to its customers. As of September 30, 2011, GSWC has excess usage charges totaling $2.8 million recorded as a regulatory liability. In July 2011, GSWC filed advice letters with the CPUC seeking authorization to refund these amounts to customers in the service areas which had water rationing. If approved, GSWC will refund the excess usage charges through a surcredit over two billing cycle period.

Bay Point Balancing Account:

In August 2009, GSWC filed an application with the CPUC requesting authorization to implement corrective measures to address water quality problems in its Bay Point water system. These corrective measures include: (i) retiring an existing water treatment plant and purchasing water from Contra Costa Water District (“CCWD”); (ii) entering into an agreement with CCWD for a capacity right to 4.4 million gallons per day of treated water for a one-time price of $4.7 million; (iii) recovering costs associated with the purchase of additional treated water to replace purchased raw water; and (iv) amending tariffs to appropriately charge GSWC’s Bay Point customers for the cost of the asset lease agreement with CCWD. In June 2011, the CPUC issued a resolution in this matter which approved the contract with CCWD and authorized GSWC to establish a balancing account to record and recover from customers the $4.7 million payment for use of CCWD’s treatment plant. In September 2011, the CPUC issued a decision which ordered GSWC to remove the costs of the existing water treatment facility from rate base and to establish six-year surcharges to recover the un-depreciated book value of the water treatment facility of approximately $965,000 and to recover the $4.9 million capacity cost (adjusted for cost index escalation) paid to CCWD. Both balances accrue interest at a rate of 6.0%. GSWC implemented these surcharges in late September 2011.

Other Regulatory Matters:

Bear Valley Electric Service:

GSWC’s BVES division has been regularly filing compliance reports with the CPUC regarding its purchases of energy from renewable energy resources. The filings have indicated that BVES has not achieved interim target purchase levels of renewable energy resources and thus, on its face, might be subject to a potential penalty. However, BVES expects that the CPUC will waive any potential fines in accordance with the CPUC’s flexible compliance rules. Accordingly, no provision for loss has been recorded in the financial statements as of September 30, 2011. BVES is continuing its efforts to procure renewable resources.

In September 2009, GSWC negotiated a ten-year contract with the Los Angeles County Sanitation District (“LACSD”) to purchase renewable energy created from landfill gas, which was finalized during the first quarter of 2010. In June 2010, GSWC filed an application with the CPUC for approval. In February 2011, GSWC was notified that the landfill gas-generated energy contract with the LACSD could potentially be terminated should LACSD determine to shut down the landfill gas generator. GSWC informed the CPUC of the potential early termination of this contract. The CPUC approved the originally filed contract in June 2011. Subsequent to the CPUC approval, GSWC and LACSD negotiated a settlement to resolve the dispute between the parties regarding certain terms of the contract. Under the terms of the settlement, GSWC agreed to waive its right to a 12 month termination notice and LACSD agreed to sell renewable energy credits (“RECs”) to GSWC. GSWC intends to file for approval with the CPUC for the purchase of these RECs in the fourth quarter of 2011. The RECs will count as renewable energy towards BVES’ efforts to achieve interim target levels of renewable energy resources and the costs of any RECs purchased will be included in the electric supply balancing account.

In November 2009, GSWC entered into a ten-year contract to purchase biogas to power BVES’ gas-fueled 8.4 MW generation facility. In July 2010, GSWC filed an application with the CPUC seeking approval of this contract. In November 2010, the contracted bioenergy vendor for the purchase of biogas advised GSWC that the biogas production will be suspended due to financial constraints. As a result of the suspension, BVES has negotiated a Biogas Option Agreement with this vendor for the purchase of future production of biogas. In March, 2011, GSWC and the Division of Ratepayer Advocates (“DRA”) reached a settlement agreement on this Biogas Option Agreement. In June 2011, the settlement agreement was approved by the CPUC.

BVES believes that it will not be subject to fines under the CPUC’s flexible compliance rules for not meeting interim targets due to its efforts to procure renewable energy resources.

New Tax Law:

In June 2011, the CPUC adopted a resolution that requires water utilities to file advice letters implementing a one-way memorandum account to track the revenue effects associated with the Tax Relief Acts, which may reduce revenue requirements in future rate case proceedings. The effective date of the memorandum account established by the resolution is April 14, 2011. More specifically, the memorandum account established by the resolution will track on a CPUC-jurisdictional, revenue requirement basis: (a) decreases in each impacted utility’s revenue requirement resulting from increases in its deferred tax reserve; and (b) other direct changes in the revenue requirement resulting from taking advantage of the Tax Relief Acts. This resolution also authorizes impacted utilities to use savings from this new tax law to invest in certain additional, needed utility infrastructure, not otherwise funded in rates, within a time frame shorter than would be practicable through the formal application or advice letter processes. The establishment of a memorandum account does not change rates, nor guarantee that rates will be changed in the future. This mechanism simply allows the CPUC to determine at a future date whether rates should be changed. GSWC has evaluated the potential impact of this resolution and does not expect it to have a material impact on its consolidated financial statement in 2011.

La Serena Plant Improvement Project:

In January 2008, the CPUC approved Region I’s general rate case effective for years 2008, 2009 and 2010. The rates authorized by the CPUC in the decision included the costs of the La Serena plant improvement project as part of the utility rate base. Subsequent to the issued decision, the DRA requested a rehearing on whether these costs were reasonable. The CPUC granted a limited rehearing, which was consolidated into GSWC’s Region II, Region III, and general office rate case, in order to consider whether it is reasonable to include in Region I’s rate base approximately $3.5 million of costs incurred in connection with the La Serena Plant Improvement Project. In November 2010, as part of GSWC’s Region II, Region III and general office rate case decision, the CPUC disallowed a portion of the La Serena plant improvement costs from utility customer rates. The CPUC found that the disallowed portion of the costs were attributable to providing service to new development and should have been recovered from the customers in the new development. As a result of the CPUC’s decision, GSWC recorded a charge of $2.2 million, which included the disallowance of certain capital costs for the La Serena Plant Improvement Project and the related revenues earned on those capital costs that will be refunded to customers.

In December 2010, DRA filed a motion for rehearing on this matter, contending that the CPUC erred in assigning a portion of the La Serena plant improvement costs to GSWC utility customers and requested that all of the capital costs related to La Serena be disallowed. In July 2011, the CPUC granted DRA’s request for rehearing. The rehearing will also address deferred rate case costs and the methodology for allocation of general office costs to GSWC’s affiliate, ASUS. At this time, management cannot predict the outcome of the rehearing or determine the estimated loss or range of loss, if any.

Pending Regulatory Matters:

Registrant records loss contingencies when an unfavorable outcome of a matter is deemed to be probable and the loss is reasonably estimable. Registrant will accrue the most likely amount when such an amount can be reasonably estimated or, at least the minimum of the range of probable loss when a range of probable loss can be estimated. Management determines the likelihood of an unfavorable outcome based on many factors such as the nature of the matter, available defenses, progress of the matter, views and opinions of legal counsel and other advisors, among others.

On February 15, 2007, the CPUC issued a subpoena to GSWC in connection with an investigation of certain work orders and charges paid to a specific contractor used previously by GSWC for numerous construction projects estimated to total $24.0 million over a period of 14 years. The CPUC’s investigation focused on whether GSWC was overcharged for these construction projects and whether these overcharges, if any, were included in customer rates. The construction projects completed by this specific contractor related primarily to work on water treatment and pumping plants which have been placed in service and are used and useful. In June 2007, GSWC received notification from the CPUC that it was instituting an audit to examine for the period 1994 to the present, GSWC’s policies, procedures, and practices regarding the granting or awarding of construction contracts or jobs.

On June 27, 2011, GSWC executed a settlement agreement with the Division of Water and Audits (“DWA”) of the CPUC that, if approved by the CPUC, would resolve the investigation. Also on June 27, 2011, GSWC and DWA jointly filed this settlement agreement for CPUC approval. A decision by the CPUC is expected later this year. Among other things, the settlement agreement resolves all disputes and disagreements between GSWC and DWA and, upon CPUC approval, the CPUC will generally release GSWC from any claim, known or unknown, foreseen or unforeseen, that arose or may have arisen as a result of the CPUC staff’s investigation into GSWC’s procurement practices as they related to contracts with this specific contractor.

Upon approval by the CPUC, the settlement provides for refunds to customers totaling $9.5 million to be made over a period of 12-36 months, as well as a reduction in rate-base and other rate adjustments totaling $3.0 million. In addition, a penalty of $1.0 million will be paid by GSWC due to GSWC’s failure to disclose the issues to the CPUC as the CPUC believes was required. GSWC recorded a loss contingency reserve in 2010 for this matter in anticipation of this settlement agreement. Therefore, no further change to the reserve was required during the three and nine months ended September 30, 2011. Management does not expect future increases in the reserve related to this specific contractor.

Finally, as part of the settlement agreement, GSWC agreed to be subject to three separate independent audits of its procurement practices over a period of ten years from the date the settlement is approved by the CPUC. The audits will cover GSWC’s procurement practices from 1994 forward and could result in further disallowances of costs. The cost of the audits will be borne by shareholders and may not be recovered by GSWC in rates to customers. At this time, management cannot predict the outcome of these audits or determine the estimated loss or range of loss, if any.

Earnings per Share/Capital Stock:

9 Months Ended

Sep. 30, 2011

Earnings per Share/Capital Stock:

Earnings per Share/Capital Stock:

Note 3 — Earnings per Share/Capital Stock:

In accordance with the accounting guidance for participating securities and earnings per share (“EPS”), Registrant uses the “two-class” method of computing EPS. The “two-class” method is an earnings allocation formula that determines EPS for each class of common stock and participating security. AWR has participating securities related to stock options and restricted stock units that earn dividend equivalents on an equal basis with AWR’s Common Shares (the “Common Shares”) that have been issued under AWR’s 2000 Stock Incentive Plan and 2008 Stock Incentive Plan (the “2000 and 2008 Employee Plans”) and the 2003 Non-Employee Directors Plan (the “2003 Directors Plan”). In applying the “two-class” method, undistributed earnings are allocated to both common shares and participating securities. The following is a reconciliation of Registrant’s net income and weighted average Common Shares outstanding for calculating basic net income per share:

Basic			For The Three Months Ended September 30,					For The Nine Months Ended September 30,
(in thousands, except per share amounts)			2011			2010		2011		2010
Net income from continuing operations			$	15,617		$	5,669	$	35,300	$	22,829
Net income from discontinued operations			(18		)	983		3,850		1,288
Total net income			15,599			6,652		39,150		24,117
Less: (a)		Distributed earnings to common shareholders	5,236			4,835		15,311		14,487
		Distributed earnings to participating securities	38			27		102		75
Undistributed earnings			10,325			1,790		23,737		9,555

(b)	Undistributed earnings allocated to common shareholders		10,250			1,780		23,580		9,506
	Undistributed earnings allocated to participating securities		75			10		157		49

Total income available to common shareholders, basic (a)+(b)			$	15,486		$	6,615	$	38,891	$	23,993

Weighted average Common Shares outstanding, basic			18,701			18,595		18,672		18,573

Basic earnings per Common Share:
Income from continuing operations			$	0.83		$	0.31	$	1.88	$	1.22
Income from discontinued operations			—			0.05		0.20		0.07
Net Income			$	0.83		$	0.36	$	2.08	$	1.29

Diluted EPS is based upon the weighted average number of Common Shares, including both outstanding shares and shares potentially issuable in connection with stock options granted under Registrant’s 2000 and 2008 Employee Plans, and the 2003 Directors Plan, and net income. At September 30, 2011 and 2010, there were 668,360 and 741,561 options outstanding, respectively, under these Plans. At September 30, 2011 and 2010, there were also 136,703 and 105,153 restricted stock units outstanding, respectively.

The following is a reconciliation of Registrant’s net income and weighted average Common Shares outstanding for calculating diluted net income per share:

Diluted	For The Three Months Ended September 30,				For The Nine Months Ended September 30,
(in thousands, except per share amounts)	2011		2010		2011		2010
Common shareholders earnings, basic	$	15,486	$	6,615	$	38,891	$	23,993
Undistributed earnings for dilutive stock options	75		10		157		49
Total common shareholders earnings, diluted	$	15,561	$	6,625	$	39,048	$	24,042

Weighted average common shares outstanding, basic	18,701		18,595		18,672		18,573
Stock-based compensation (1)	151		139		144		141
Weighted average common shares outstanding, diluted	18,852		18,734		18,816		18,714

Diluted earnings per Common Share:
Income from continuing operations	$	0.83	$	0.30	$	1.88	$	1.21
Income from discontinued operations	—		0.05		0.20		0.07
Net Income	$	0.83	$	0.35	$	2.08	$	1.28

(1) In applying the treasury stock method of reflecting the dilutive effect of outstanding stock-based compensation in the calculation of diluted EPS, 425,839 and 395,337 stock options at September 30, 2011 and 2010, respectively, were deemed to be outstanding in accordance with accounting guidance on earnings per share. All of the 136,703 and 105,153 restricted stock units at September 30, 2011 and 2010, respectively, were included in the calculation of diluted EPS for the nine months ended September 30, 2011 and 2010.

Stock options of 241,921and 249,826 were outstanding at September 30, 2011 and 2010, respectively, but not included in the computation of diluted EPS because the related option exercise price was greater than the average market price of AWR’s Common Shares for the nine months ended September 30, 2011 and 2010. Stock options of 600 and 96,398 were outstanding at September 30, 2011 and 2010, respectively, but not included in the computation of diluted EPS because they were anti-dilutive.

During the nine months ended September 30, 2011 and 2010, Registrant issued 100,148 and 71,691 Common Shares, for approximately $2,350,000 and $1,798,000, respectively, under Registrant’s Common Share Purchase and Dividend Reinvestment Plan, the 401(k) Plan, the 2000 and 2008 Employee Plans, and the 2003 Directors Plan. In addition, Registrant purchased 319,470 and 109,273 Common Shares on the open market during the nine months ended September 30, 2011 and 2010, respectively, under Registrant’s 401(k) Plan and the Common Share Purchase and Dividend Reinvestment Plan. The Common Shares purchased by Registrant were used to satisfy the requirements of these plans.

During the three months ended September 30, 2011 and 2010, AWR paid quarterly dividends of approximately $5.2 million, or $0.28 per share, and $4.8 million, or $0.26 per share, respectively. During the nine months ended September 30, 2011 and 2010, AWR paid quarterly dividends to shareholders of approximately $15.3 million, or $0.82 per share, and $14.5 million, or $0.78 per share.

- Definition

The entire disclosure for earnings per share.

+ References+ Details

Derivative Instruments:

9 Months Ended

Sep. 30, 2011

Derivative Instruments:

Derivative Instruments:

Note 4 — Derivative Instruments:

In October 2008, GSWC executed a purchased power contract that permits GSWC to purchase power at a fixed cost over three and five year terms depending on the amount of power and the period during which the power is purchased under the contract. The contract is subject to the accounting guidance for derivatives and requires mark-to-market derivative accounting. GSWC began receiving power under this contract on January 1, 2009. In May 2009, the CPUC issued a final decision approving the contract and authorized GSWC to establish a regulatory asset and liability memorandum account to offset the entries required by the accounting guidance. Accordingly, all unrealized gains and losses generated from this purchased power contract are deferred on a monthly basis into a non-interest bearing regulatory memorandum account that tracks the changes in fair value of the derivative throughout the term of the contract. As of September 30, 2011 there was a $7.6 million cumulative unrealized loss which has been included in the memorandum account. This memorandum account does not impact GSWC’s earnings.

Registrant adopted accounting guidance for fair value measurements effective January 1, 2008 for financial assets and liabilities measured on a recurring basis. This guidance applies to all financial assets and financial liabilities that are being measured and reported on a fair value basis. There was no impact in the adoption of this accounting guidance to the consolidated financial statements. However, the accounting guidance requires disclosure that establishes a framework for measuring fair value and expands disclosure about fair value measurements. The guidance requires fair value measurements to be classified and disclosed in one of the following three categories:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability, or

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

Registrant’s valuation model utilizes various inputs that include quoted market prices for energy over the duration of the contract. The market prices used to determine the fair value for this derivative instrument were estimated based on independent sources such as broker quotes and publications that are not observable in or corroborated by the market. Registrant receives one broker quote to determine the fair value of its derivative instrument. When such inputs have a significant impact on the measurement of fair value, the instrument is categorized in Level 3. Accordingly, the valuation of the derivative on Registrant’s purchased power contract has been classified as Level 3 for all periods presented.

The following table presents changes in the fair value of the derivative for the three and nine months ended September 30, 2011 and 2010.

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
(dollars in thousands)	2011			2010			2011			2010
Balance, at beginning of the period	$	(7,475	)	$	(9,552	)	$	(6,850	)	$	(7,338	)
Unrealized loss on purchased power contracts	(101		)	(1,809		)	(726		)	(4,023		)
Balance, at end of the period	$	(7,576	)	$	(11,361	)	$	(7,576	)	$	(11,361	)

For the three and nine months ended September 30, 2011 and 2010, the unrealized loss was included in regulatory assets due to regulatory mechanisms in place effective January 1, 2009 and has no impact to Registrant’s earnings. Upon expiration of the purchased power contract, the balance in this regulatory memorandum account will be zero.

- Definition

The entire disclosure for the entity's entire derivative instruments and hedging activities. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items.

+ References

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+ Details

Fair Value of Financial Instruments:

9 Months Ended

Sep. 30, 2011

Fair Value of Financial Instruments:

Fair Value of Financial Instruments:

Note 5 — Fair Value of Financial Instruments:

For cash and cash equivalents, accounts receivable, accounts payable and short-term debt, the carrying amount is assumed to approximate fair value due to the short-term nature of the amounts. The table below estimates the fair value of long-term debt held by GSWC. Rates available to GSWC at September 30, 2011 and December 31, 2010 for debt with similar terms and remaining maturities were used to estimate fair value for long-term debt. Changes in the assumptions will produce differing results.

	September 30, 2011				December 31, 2010
(dollars in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial liabilities:
Long-term debt—GSWC	$	340,762	$	438,963	$	300,215	$	356,005

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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+ Details

Military Privatization:

9 Months Ended

Sep. 30, 2011

Military Privatization:

Military Privatization:

Note 6 — Military Privatization:

ASUS, through its wholly-owned subsidiaries, has entered into agreements with the U.S. government to operate and maintain the water and/or wastewater systems at various military bases pursuant to 50-year, firm fixed price contracts, subject to periodic prospective price redeterminations and modifications for changes in circumstances, and changes in laws and regulations.

The amounts charged by the Military Utility Privatization Subsidiaries for water and/or wastewater services at the respective military bases are based upon the terms of the 50-year contracts between ASUS or its subsidiaries and the U.S. government and include a monthly net fixed price for operation and maintenance and an amount to cover renewals and replacements for the first two years of the contract. Under the terms of each of these contracts, prices are to be redetermined at the end of the initial two year period and every three years thereafter, unless otherwise agreed to by the parties. In addition, prices may be equitably adjusted for changes in law and other circumstances and changes in wages and fringe benefits. These adjustments can be retrospective and/or prospective. ASUS has experienced delays in redetermining prices and equitable adjustments as required by the terms of these contracts. In 2010, ASUS recorded $5.6 million in additional revenues (approximately $5.3 million of which was retroactive through December 31, 2009) for two contract modifications approved by the U.S. government for requests for equitable adjustment regarding inventory levels at ONUS (for operations at Fort Bragg) and FBWS (for operations at Fort Bliss).

Revenues from firm, fixed-price construction contracts are recognized based on the percentage-of-completion method of accounting. In accordance with generally accepted accounting principles, revenue recognition under the percentage-of-completion method requires ASUS to estimate the progress toward completion on a contract in terms of efforts (costs incurred) or in terms of results achieved (such as units constructed). Construction costs include all direct material and labor costs charged by employees or by subcontractors and those indirect costs related to contract performance, such as indirect labor, supplies, and tools.

Changes to the estimated contract profits are made in the period in which circumstances requiring the revision become known. During the second quarter of 2011, a change in estimated costs for ONUS to complete a water and wastewater pipe replacement project at Fort Bragg was made as a result of successful negotiations with contractors providing construction services reducing the estimated cost to complete the pipeline replacement work. The effect of the change in cost estimate resulted in an increase in pretax operating income of $2.9 million for work previously performed by ONUS on this project. The total project is scheduled to be completed by early 2014.

Income Taxes:

9 Months Ended

Sep. 30, 2011

Income Taxes:

Income Taxes:

Note 7 — Income Taxes:

As a regulated utility, GSWC treats certain temporary differences as flow-through adjustments in computing its income tax provision consistent with the income tax approach approved by the CPUC for ratemaking purposes. Flow-through adjustments increase or decrease tax expense in one period, with an offsetting increase or decrease occurring in another period. Giving effect to these temporary differences as flow-through adjustments typically results in a greater variance between the effective tax rate (“ETR”) and the statutory federal income tax rate in any given period than would otherwise exist if GSWC were not required to account for its income taxes as a regulated enterprise. The GSWC ETRs for the three months ended September 30, 2011 and 2010 were 41.4% and 53.3%, respectively. The GSWC ETRs for the nine months ended September 30, 2011 and 2010 were 42.9% and 46.0%, respectively. The GSWC ETRs deviated from the statutory rate primarily due to state taxes and differences between book and taxable income that are treated as flow-through adjustments in accordance with regulatory requirements (principally plant-, rate-case- and compensation-related items). The decreases in GSWC’s ETR for the three and nine months ended September 30, 2011 as compared to 2010 were primarily due to deferred rate-case costs and costs of removal for utility plant as well as nondeductible permanent items incurred in 2010.

GSWC continues to compute its state tax provision as if GSWC were autonomous and not a member of AWR’s unitary group. This approach is consistent with the methodology used for ratemaking purposes. Since all of GSWC’s activities are conducted within California, GSWC’s state tax provision does not reflect apportionment of its income.

Changes in Tax Law:

The Small Business Jobs Act of 2010 and the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (“Tax Relief Acts”) extended 50% bonus depreciation for qualifying property through 2012 and created a new 100% bonus depreciation for qualifying property placed in service between September 9, 2010 and December 31, 2011. As a result of these law changes, Registrant’s current tax expense for 2010 and 2011 reflects benefits from the Tax Relief Acts. Although these law changes reduce AWR’s current taxes payable, they do not reduce its total income tax expense or ETR.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

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-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Section 08

-Paragraph h

-Article 4

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+ Details

Employee Benefit Plans:

9 Months Ended

Sep. 30, 2011

Employee Benefit Plans:

Employee Benefit Plans:

Note 8 — Employee Benefit Plans:

The components of net periodic benefit costs, before allocation to the overhead pool, for Registrant’s pension plan, postretirement plan, and Supplemental Executive Retirement Plan (“SERP”) for the three and nine months ended September 30, 2011 and 2010 are as follows:

	For The Three Months Ended September 30,
	Pension Benefits						Other Postretirement Benefits						SERP
(dollars in thousands)	2011			2010			2011			2010			2011		2010
Components of Net Periodic Benefits Cost:
Service cost	$	1,406		$	1,199		$	107		$	98		$	150	$	108
Interest cost	1,631			1,526			153			156			116		89
Expected return on plan assets	(1,587		)	(1,313		)	(74		)	(64		)	—		—
Amortization of transition	—			—			105			105			—		—
Amortization of prior service cost (benefit)	30			30			(50		)	(50		)	40		40
Amortization of actuarial loss	310			293			—			—			34
Net periodic pension cost under accounting standards	1,790			1,735			241			245			340		237
Regulatory adjustment — deferred	(127		)	—			—			—			—		—
Total expense recognized, before allocation to overhead pool	$	1,663		$	1,735		$	241		$	245		$	340	$	237

	For The Nine Months Ended September 30,
	Pension Benefits						Other Postretirement Benefits						SERP
(dollars in thousands)	2011			2010			2011			2010			2011		2010
Components of Net Periodic Benefits Cost:
Service cost	$	4,218		$	3,597		$	321		$	294		$	450	$	324
Interest cost	4,893			4,578			459			468			348		267
Expected return on plan assets	(4,761		)	(3,939		)	(221		)	(192		)	—		—
Amortization of transition	—			—			315			315			—		—
Amortization of prior service cost (benefit)	89			90			(150		)	(150		)	121		120
Amortization of actuarial loss	931			879			—			—			101		—
Net periodic pension cost under accounting standards	5,370			5,205			724			$	735		1,020		711
Regulatory adjustment — deferred	(380		)	—			—			—			—		—
Total expense recognized, before allocation to overhead pool	$	4,990		$	5,205		$	724		$	735		$	1,020	$	711

Registrant expects to contribute approximately $500,000 to the postretirement medical plan during the fourth quarter of 2011. Registrant contributed $5.5 million and $6.6 million to the pension plan during the three and nine months ended September 30, 2011, respectively.

In May 2009, the Board of Directors approved the establishment of a Rabbi Trust created for the SERP plan. Assets in a Rabbi Trust can be subject to the claims of creditors; therefore, they are not considered as an asset for purposes of computing the SERP’s funded status. During the three and nine months ended September 30, 2011, Registrant deposited $1.4 million into the Rabbi Trust. As of September 30, 2011, the balance in the Rabbi Trust totaled $2.7 million and is included in Registrant’s other property and investments.

Regulatory Adjustment:

In November 2010, the CPUC authorized GSWC to establish a two-way balancing account, effective January 1, 2010, for its three water regions and the general office to track differences between the forecasted annual pension expenses adopted in rates for 2010, 2011 and 2012 and the actual annual expense to be recorded by GSWC in accordance with the accounting guidance for pension costs. For the three and nine months ended September 30, 2011, GSWC’s actual expense under the accounting guidance for pension was greater than amounts included in customer rates by $127,000 and $380,000, respectively. This under-collection has been recorded in the two-way pension balancing account included in regulatory assets (Note 2). As of September 30, 2011, GSWC has included a $2.2 million under-collection in the two-way pension balancing account.

- Definition

The entire disclosure for pension and other postretirement benefits.

+ References

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-Name Implementation Guide (Q and A)

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-Paragraph 63

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+ Details

Contingencies:

9 Months Ended

Sep. 30, 2011

Contingencies:

Contingencies:

Note 9 — Contingencies:

Water Quality-Related Litigation:

Perchlorate and/or Volatile Organic Compounds (“VOC”) have been detected in five wells servicing GSWC’s South San Gabriel System. GSWC filed suit in federal court, along with two other affected water purveyors and the San Gabriel Basin Water Quality Authority (“WQA”), against some of those allegedly responsible for the contamination of two of these wells. Some of the other potential defendants settled with GSWC, other water purveyors and the WQA (the “Water Entities”), on VOC related issues prior to the filing of the lawsuit. In response to the filing of the lawsuit, the Potentially Responsible Party (“PRP”) defendants filed motions to dismiss the suit or strike certain portions of the suit. The judge issued a ruling on April 1, 2003 granting in part and denying in part the PRP’s motions. A key ruling of the court was that the water purveyors, including GSWC, by virtue of their ownership of wells contaminated with hazardous chemicals are themselves PRPs under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”).

GSWC has, pursuant to permission of the court, amended its suit to claim certain affirmative defenses as an “innocent” party under CERCLA. Registrant is presently unable to predict the outcome of this ruling on its ability to fully recover from the PRPs, past and future costs associated with the treatment of these wells. In this same suit, the PRPs have filed cross-complaints against the Water Entities, the MWD, the Main San Gabriel Basin Watermaster and others on the theory that they arranged for and did transport contaminated water into the Main San Gabriel Basin for use by GSWC and the other two affected water purveyors and for other related claims.

On August 29, 2003, the US Environmental Protection Agency (“EPA”) issued Unilateral Administrative Orders (“UAO”) against 41 parties deemed responsible for polluting the groundwater in that portion of the San Gabriel Valley from which the two impacted GSWC wells draw water. GSWC was not named as a party to the UAO. The UAO requires these parties to remediate the contamination.

The judge in the lawsuit stayed the matter on October 12, 2004 in order to allow the parties to explore settlement and appointed a special master to oversee mandatory settlement discussions between the PRPs and the Water Entities. EPA has also conducted settlement discussions with several PRPs regarding the UAO. The Water Entities and EPA have worked closely to coordinate their settlement discussions under the auspices of the special master in order to arrive at a complete resolution of all issues affecting the lawsuit and the UAO. Settlements have been reached with some PRPs.

On March 28, 2011, the Court lifted the stay and the matter has proceeded in litigation. The EPA filed a separate complaint against the remaining PRPs and their matter was consolidated with those filed by the Water Entities. In the EPA case, the remaining PRPs filed a cross-complaint against the Water Entities making the same basic allegations as in their already existing cross-complaint. The cross complaint was filed on August 1, 2011. Registrant believes the filing does not materially alter the structure and claims in the case. GSWC will continue to work with EPA and the special master to reach settlement with all PRPs or proceed to trial. On October 17, 2011 an additional 30-day stay was granted to continue settlement discussions. Registrant is presently unable to predict the ultimate outcome of this matter.

Condemnation of Properties:

The laws of the State of California provide for the acquisition of public utility property by governmental agencies through their power of eminent domain, also known as condemnation, where doing so is necessary and in the public interest. In addition, these laws provide: (i) that the owner of utility property may contest whether the condemnation is actually necessary and in the public interest, and (ii) that the owner is entitled to receive the fair market value of its property if the property is ultimately taken.

The Town of Apple Valley (the “Town”) abandoned its activities related to a potential condemnation of GSWC’s water system serving the Town in 2007. However, in January 2011, the Town Council directed staff to update the previously prepared financial feasibility study for the acquisition of GSWC’s water systems. The Town also created a Blue Ribbon Water Commission (“BRWC”) to provide recommendations on the items pending before the CPUC associated with the two water companies (including GSWC) serving the Town. The BRWC is scheduled to review the updated feasibility study during the fourth quarter of 2011. GSWC’s Apply Valley water systems serve approximately 2,800 customers.

In April 2011, an organization called Ojai FLOW (Friends of Locally Owned Water) started a local campaign for the Casitas Municipal Water District to purchase GSWC’s Ojai water system. The Ojai City Council passed a resolution supporting the efforts of Ojai FLOW at their regular meeting on April 26, 2011. In May 2011, Ojai FLOW submitted a petition with over 1,800 signatures to the Casitas Municipal Water District supporting the recommended acquisition of GSWC’s Ojai water system. The Casitas Municipal Water District’s Water Resources Committee is presently considering the proposal by Ojai FLOW. GSWC serves approximately 3,000 customers in Ojai.

Except for the Town of Apple Valley and the City of Ojai, Registrant is currently not involved in activities related to the potential condemnation of any of its water customer service areas or in its BVES customer service area. No formal condemnation proceedings have been filed against any of the Registrant’s service areas during the past three years.

Santa Maria Groundwater Basin Adjudication:

In 1997, the Santa Maria Valley Water Conservation District (“plaintiff”) filed a lawsuit against multiple defendants, including GSWC, the City of Santa Maria, and several other public water purveyors. The plaintiff’s lawsuit sought an adjudication of the Santa Maria Groundwater Basin (the “Basin”). A stipulated settlement of the lawsuit has been reached, subject to CPUC approval. The settlement, among other things, if approved by the CPUC, would preserve GSWC’s historical pumping rights and secure supplemental water rights for use in case of drought or other reductions in the natural yield of the Basin. GSWC, under the stipulation, has a right to 10,000 acre-feet of groundwater replenishment provided by the Twitchell Project, a storage and flood control reservoir project operated by the Santa Maria Valley Conservation District. A monitoring and annual reporting program has been established to allow the parties to responsibly manage the Basin and to respond to shortage conditions. If severe water shortage conditions are found over a period of five years, the management area engineer will make findings and recommendations to alleviate such shortages. In the unlikely case that the Basin experiences severe shortage conditions, the court has the authority to limit GSWC’s groundwater production to 10,248 acre-feet per year, based on developed water in the Basin. Over the last five years, GSWC’s average groundwater production has been 10,140 acre-feet per year.

On February 11, 2008, the court issued its final judgment, which approves and incorporates the stipulation. The judgment awards GSWC prescriptive rights to groundwater against the non-stipulating parties. In addition, the judgment grants GSWC the right to use the Basin for temporary storage and to recapture 45 percent of the return flows that are generated from its importation of State Water Project water. Pursuant to this judgment, the court retains jurisdiction over all of the parties to make supplemental orders or to amend the judgment as necessary. On March 20, 2008, the non-stipulating parties filed notices of appeal. In August 2010, the appellants filed their opening briefs. Registrant is unable to predict the outcome of the appeal.

Aerojet Note Receivable:

Pursuant to a settlement agreement with Aerojet, GSWC has a note receivable which is scheduled to be paid by Aerojet in installments over five years beginning in December 2009. GenCorp Inc. is the parent of Aerojet. As of September 30, 2011, GSWC has received from GenCorp Inc. a total of $5.0 million including interest as payment of the first and second annual installments under the terms of the 2004 settlement agreement. As of September 30, 2011, the unpaid portion of the note receivable is $6.4 million, comprised of $4.8 million in principal and $1.6 million in accrued interest. At this time, management believes the note receivable from Aerojet is fully collectible and has not provided a reserve for uncollectible amounts as of September 30, 2011. GSWC will continue to assess recoverability of this note receivable.

Environmental Clean-Up and Remediation:

Chadron Plant: GSWC has been involved in environmental remediation and clean-up at a plant site (“Chadron Plant”) that contained an underground storage tank which was used to store gasoline for its vehicles. This tank was removed in July 1990 along with the dispenser and ancillary piping. Since then, GSWC has been involved in various remediation activities at this site. Recent site assessments have been conducted which showed that there was more gasoline at higher concentrations spread over a larger area than previously measured. Remediation is estimated to take two more years, followed by at least one year of monitoring and reporting. As of September 30, 2011, the total spent to clean-up and remediate GSWC’s plant facility is approximately $3.5 million, of which $1.5 million has been paid by the State of California Underground Storage Tank Fund. Amounts paid by GSWC have been included in rate base and approved by the CPUC for recovery.

As of September 30, 2011, GSWC has an accrued liability for the estimated additional cost of $1.2 million to complete the clean-up at the site. The ultimate cost may vary as there are many unknowns in remediation of underground gasoline spills and this is an estimate based on currently available information. Management also believes it is probable that the estimated additional costs will be approved in rate base by the CPUC.

Other Litigation:

Registrant is also subject to other ordinary routine litigation incidental to its business. Management believes that rate recovery, proper insurance coverage and reserves are in place to insure against property, general liability and workers’ compensation claims incurred in the ordinary course of business. Registrant is unable to predict an estimate of the loss, if any, resulting from any pending suits or administrative proceedings.

- Definition

The entire disclosure for commitments and contingencies.

+ References

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-Publisher FASB

-Name FASB Interpretation (FIN)

-Number 14

-Paragraph 3

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+ Details

Discontinued Operations:

9 Months Ended

Sep. 30, 2011

Discontinued Operations:

Discontinued Operations:

Note 10 — Discontinued Operations:

On June 7, 2010, Registrant entered into a stock purchase agreement with EPCOR Water (USA) Inc. to sell all of the common shares of CCWC for a total purchase price of $34.7 million, including the assumption of approximately $5.6 million of long-term debt. Regulatory approval of the transaction was received from the Arizona Corporation Commission (“ACC”) on April 7, 2011. On May 26, 2011, CCWC’s Board of Directors declared a $1.5 million cash dividend to AWR, which was also paid on May 26, 2011. The sale closed on May 31, 2011 and AWR received approximately $29.0 million in cash which was used primarily to pay down short-term borrowings. In addition, the purchase price was subject to certain adjustments for changes in retained earnings based on a final audit, which resulted in an additional $578,000 received by AWR in the third quarter of 2011. The completion of the sale generated a gain (net of taxes and transaction costs) of approximately $2.2 million.

The assets and liabilities of CCWC have been classified as current assets and liabilities held for sale as of December 31, 2010. The operational results for the periods presented and the gain on disposal of CCWC are reported in discontinued operations.

The carrying amounts of the major classes of assets and liabilities of CCWC included in discontinued operations are as follows:

	September 30,		December 31,
(dollars in thousands)	2011		2010
Assets:
Utility Plant, net	$	—	$	44,085
Goodwill, net	—		3,321
Other assets	—		3,477
Total assets of discontinued operations	$	—	$	50,883

Liabilities:
Advances and contributions in aid of construction, net	$	—	$	17,867
Long term debt	—		5,645
Other liabilities	—		3,519
Total liabilities of discontinued operations	$	—	$	27,031

Regulatory Matters - Gain on Settlement for Removal of a Well:

In 2005, in an agreement with the Fountain Hills Sanitary District (“FHSD”), CCWC agreed to permanently cease using one of its wells in order for the FHSD to secure an Aquifer Protection Permit for its recharge system in exchange for a $1,520,000 settlement payment from the FHSD . Based on previous decisions of the ACC on similar gains, CCWC recognized a net gain of $760,000 in 2005 related to the settlement agreement and established a regulatory liability for the remaining $760,000 pending the ACC’s review of this matter. On October 8, 2009, the ACC ordered CCWC to treat the entire settlement proceed as a reduction to rate base. As a result, CCWC recognized a loss of $760,000 during the third quarter of 2009 and established a regulatory liability for this amount. This effectively reversed the original gain recorded in 2005.

In November 2009, CCWC filed an application for rehearing on several issues including the sharing of this gain from the settlement proceeds. On April 7, 2011, the ACC issued a decision that reversed its October 2009 decision and allowed CCWC to retain 50% of the $1,520,000 settlement proceeds. Accordingly, in the second quarter of 2011, CCWC recorded a gain on settlement on removal of a well of $760,000. As part of the April 7, 2011 ACC decision, CCWC was authorized to recover the difference in revenues between what would have been collected to-date had the April 7, 2011 decision been in place effective October 2009, and revenues actually collected to-date under rates approved from the original 2009 decision. Accordingly, in May 2011 CCWC recorded a regulatory asset for retroactive revenues of $149,000, which was included as part of the purchase price of CCWC.

A summary of discontinued operations presented in the consolidated statements of income for the three and nine months ended September 30, 2011 and 2010 are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
(dollars in thousands)	2011			2010			2011			2010
Operating revenues	$	—		$	2,489		$	3,492		$	6,578

Supply costs	—			328			584			1,092
Other operating expenses (1)	—			389			836			2,368
Gain on settlement for removal of a well	—			—			(760		)	—
Total operating expenses	—			717			660			3,460

Operating income	—			1,772			2,832			3,118

Interest expense, net	—			(87		)	(142		)	(268		)

Income before income taxes	—			1,685			2,690			2,850

Income tax expense (2)	—			671			1,078			1,136
Income from the operations of discontinued operations, net of tax	—			1,014			1,612			1,714

Gain on sale of business, net of tax	—			—			2,454			—
Transaction costs, net of tax (3)	(18		)	(31		)	(216		)	(426		)
Net gain on sale and transaction costs	(18		)	(31		)	2,238			(426		)

Income (loss) from discontinued operations, net of tax (4)	$	(18	)	$	983		$	3,850		$	1,288

(1) In accordance with the accounting guidance relating to assets held for sale, Registrant ceased recording depreciation expense for CCWC as of June 2010.

(2) Income tax expense does not include the effects of CCWC’s inclusion in the AWR combined California unitary return, which are included in, and do not materially affect, the income tax expense of continuing operations.

(3) Included in discontinued operations for the three and nine months ended September 30, 2011 are direct transaction costs of $33,000 and $446,000, respectively, for legal and consulting services in connection with the sale of CCWC. Transaction costs for the three and nine months ended September 30, 2010 amounted to $51,000 and $708,000, respectively.

(4) Corporate overhead costs allocated to CCWC have been excluded from discontinued operations. The majority of these costs continue to be incurred, primarily at GSWC. Accordingly, these corporate overhead costs have been included in other operating expenses and administrative and general expenses as part of continuing operations in the consolidated statements of income. Such costs allocated to CCWC that have been reflected as part of continuing operations amounted to $233,000 for the three months ended September 30, 2010, and $356,000 and $747,000 for the nine months ended September 30, 2011 and 2010, respectively. No costs were allocated to CCWC for the three months ended September 30, 2011.

- Definition

The entire disclosure for the facts and circumstances leading to the completed or expected disposal, manner and timing of disposal, the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the segment in which the disposal group was reported, and the classification (whether sold or classified as held for sale) and carrying value of the assets and liabilities comprising the disposal group. Includes all disposal groups, including those classified as components of the entity (discontinued operations).

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+ Details

Business Segments

9 Months Ended

Sep. 30, 2011

Business Segments

Business Segments

Note 11 — Business Segments

AWR has three reportable segments, water, electric and contracted services, whereas GSWC has two segments, water and electric. Within the segments, AWR has two continuing principal business units: water and electric service utility operations conducted through GSWC, and a contracted services unit conducted through ASUS and its subsidiaries. All activities of GSWC are geographically located within California. The operating activities of CCWC have been included in discontinued operations as described in Note 10. All activities of CCWC were located in the state of Arizona. Both GSWC and CCWC are rate-regulated utilities.

Activities of ASUS and its subsidiaries are conducted in California, Maryland, New Mexico, North Carolina, South Carolina, Texas and Virginia. ASUS’s wholly owned subsidiaries are regulated by the state in which the subsidiary primarily conducts water and/or wastewater operations. Fees charged for operation and maintenance and renewal and replacement services are based upon the terms of the contracts with the U.S. government which have been filed with the commissions in the states in which ASUS’s subsidiaries are incorporated. On a stand-alone basis, AWR has no material assets other than its investments in its subsidiaries.

The tables below set forth information relating to GSWC’s operating segments, ASUS and its subsidiaries, and other matters. Certain assets, revenues and expenses have been allocated in the amounts set forth. The identifiable assets are net of respective accumulated provisions for depreciation. Capital additions reflect capital expenditures paid in cash and exclude property installed by developers and conveyed to GSWC and through May 31, 2011 for CCWC.

	As Of And For The Three Months Ended September 30, 2011
	GSWC				CCWC		ASUS		AWR			Consolidated
(dollars in thousands)	Water		Electric		Water		Contracts		Parent			AWR
Operating revenues	$	89,756	$	8,746	$	—	$	21,395	$	—		$	119,897
Operating income (loss) (1)	26,752		1,648		—		4,025		(5		)	32,420
Interest expense, net	5,588		401		—		84		(81		)	5,992
Identifiable assets	848,647		38,063		—		4,424		—			891,134
Depreciation and amortization expense	8,832		502		—		220		—			9,554
Income (loss) from discontinued operations, net of tax (2)	—		—				—		(18		)	(18		)
Capital additions	24,690		684		—		905		—			26,279

	As Of And For The Three Months Ended September 30, 2010
	GSWC				CCWC			ASUS		AWR			Consolidated
(dollars in thousands)	Water		Electric		Water			Contracts		Parent			AWR
Operating revenues	$	82,634	$	7,917	$	—		$	20,749	$	—		$	111,300
Operating income (loss) (1)	12,852		1,133		(233		)	3,159		(14		)	16,897
Interest expense, net	4,341		360		—			59		37			4,797
Identifiable assets	811,596		36,945		—			3,510		—			852,051
Depreciation and amortization expense	7,621		560		—			216		—			8,397
Income from discontinued operations, net of tax (2)	—		—		983			—		—			983
Capital additions	17,878		873		192			415		—			19,358

	As Of And For The Nine Months Ended September 30, 2011
	GSWC				CCWC			ASUS		AWR			Consolidated
(dollars in thousands)	Water		Electric		Water			Contracts		Parent			AWR
Operating revenues	$	234,233	$	27,180	$	—		$	62,620	$	—		$	324,033
Operating income (loss) (1)	65,320		4,829		(356		)	9,820		(59		)	79,554
Interest expense, net	16,780		1,217		—			309		1			18,307
Identifiable assets	848,647		38,063		—			4,424		—			891,134
Depreciation and amortization expense	26,662		1,509		—			658		—			28,829
Income from discontinued operations, net of tax (2)	—		—		1,612			—		2,238			3,850
Capital additions	59,776		2,313		—			1,485		—			63,574

	As Of And For The Nine Months Ended September 30, 2010
	GSWC				CCWC			ASUS			AWR			Consolidated
(dollars in thousands)	Water		Electric		Water			Contracts			Parent			AWR
Operating revenues	$	211,507	$	26,741	$	—		$	56,994		$	—		$	295,242
Operating income (loss) (1)	41,114		4,309		(747		)	12,606			(84		)	57,198
Interest expense, net	14,610		1,117		—			(310		)	89			15,506
Identifiable assets	811,596		36,945		—			3,510			—			852,051
Depreciation and amortization expense	22,864		1,680		—			577			—			25,121
Income from discontinued operations, net of tax (2)	—		—		1,288			—			—			1,288
Capital additions	54,588		1,614		406			1,095			—			57,703

(1) Operating income (loss) includes CCWC’s allocated corporate overhead costs that are now primarily at GSWC.

(2) In accordance with the accounting guidance relating to assets held for sale, Registrant ceased recording depreciation expense for CCWC as of June 2010.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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Document and Entity Information	9 Months Ended
Document and Entity Information	Sep. 30, 2011	Nov. 04, 2011
Document and Entity Information
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